Deems v. Commissioner of the IRS

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
MAY 17, 2011
No. 10-13378 JOHN LEY
Non-Argument Calendar CLERK
________________________
Tax Court No. 1273-09L
LARRY DEEMS,
Petitioner-Appellant,
versus
COMMISSIONER OF THE INTERNAL REVENUE SERVICE,
Respondent-Appellee.
__________________________
Appeal from a Decision of the
United States Tax Court
_________________________
(May 17, 2011)
Before TJOFLAT, MARCUS and BLACK, Circuit Judges.
PER CURIAM:
Larry Deems, a taxpayer proceeding pro se, appeals the decision of the Tax
Court in favor of the Internal Revenue Service (“IRS”) and its order sanctioning
him in the sum of $1,000 for presenting frivolous arguments. He contends that the
decision and order should be set aside because the court erred in denying him a
face-to-face Collections Due Process (“CDP”) hearing and demonstrated a judicial
bias against him as a pro se litigant.
I.
We review the Tax Court’s decision to grant summary judgment de novo
and review its imposition of sanctions for an abuse of discretion. Roberts v.
C.I.R., 329 F.3d 1224, 1227, 1229 (11th Cir. 2003).
A levy may not be made unless the taxpayer is notified in writing of his
right to a CDP hearing. 26 U.S.C. § 6330(a)(1); Redeker-Barry v. United States,
476 F.3d 1189, 1190 (11th Cir. 2007). If a hearing is requested and the grounds
are stated, the IRS Office of Appeals will hold the hearing. 26 U.S.C.
§ 6330(b)(1). During a CDP hearing, a taxpayer may raise “any relevant issue
relating to the unpaid tax or the proposed levy.” Id. § 6330(c)(2)(A). Relevant
issues include: “(i) appropriate spousal defenses; (ii) challenges to the
appropriateness of collection actions; and (iii) offers of collection alternatives.”
Id. § 6330(c)(2)(A). The appeals officer need not consider frivolous arguments,
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such as positions designated by the IRS as frivolous or arguments reflecting a
desire to delay the administration of the tax laws. Id. §§ 6330(c)(4)(B),
6702(b)(2)(A).
A taxpayer should provide the appeals officer with “all relevant information
requested,” so the officer can consider “the facts and issues involved in [a CDP]
hearing.” 26 C.F.R. § 301.6330-1(e)(1). A taxpayer, however, may not challenge
the amount or existence of the underlying tax liability unless he “did not receive
any statutory notice of deficiency for such tax liability or did not otherwise have
an opportunity to dispute such tax liability.” 26 U.S.C. § 6330(c)(2)(B).
Because proceedings before an appeals officer are informal, tax regulations
provide that a CDP hearing may, but is not required to, consist of a face-to-face
meeting. See Roberts, 329 F.3d at 1228-29; see also 26 C.F.R. § 301.6330-1(d)(2)
(A-D6) (“CDP hearings . . . are informal in nature and do not require the Appeals
officer or employee and the taxpayer, or the taxpayer’s representative, to hold a
face-to-face meeting”). A CDP hearing may consist of one or more written or oral
communications between an appeals officer and the taxpayer, with or without a
face-to-face meeting. See 26 C.F.R. § 301.6330-1(d)(2) (A-D6). The formal
hearing procedures required under the Administrative Procedure Act, 5 U.S.C.
§ 551, et seq., do not apply to CDP hearings. Id. A face-to-face meeting will not
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be granted if “the taxpayer wishes only to raise irrelevant or frivolous issues
concerning [the] liability.” Id. § 301.6330-1(d)(2) (A-D8). In addition, a
face-to-face meeting regarding a collection alternative will not be granted if the
taxpayer is not eligible for an alternative because, for example, he has not filed a
required tax return. Id.
“The Tax Court may impose sanctions on a taxpayer, if he institutes or
maintains proceedings primarily for delay or his position is frivolous or
groundless.” Roberts, 329 F.3d at 1229 (citing 26 U.S.C. § 6673(a)(1)(A)-(B)).
We have affirmed sanctions where a taxpayer was “on notice that his claims were
frivolous.” Roberts, 329 F.3d at 1229. The Tax Court is empowered to impose
sanctions in any amount up to $25,000. 26 U.S.C. § 6673(a)(1).
The record indicates that a notice of deficiency was mailed to Deems’s last
known address, but that Deems denied receiving it. If Deems did not receive the
notice, he was entitled to challenge his underlying tax liability. Nevertheless, he
chose not to do so. Instead, he repeatedly requested a face-to-face hearing,
suggesting that the IRS was harassing him in its effort to collect his delinquent
2003 income taxes. Contrary to Deems’s position, Appeals Settlement Officer
(“ASO”) Rivers was not required to give Deems a face-to-face hearing. See
Roberts, 329 F.3d at 1228-29; see also 26 C.F.R. § 301.6330-1(d)(2) (A-D6, A-
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D8). The record demonstrated that ASO Rivers exchanged at least two written
communications with Deems and attempted to contact him by phone, after
providing him with notice of the date and time of the phone call. Deems refused
to provide ASO Rivers with the requested financial information, and although
Deems alleges that he desired to discuss collection alternatives, he did not provide
any specific arguments regarding his eligibility for a collection alternative. See 26
C.F.R. § 301.6330-1(d)(2) (A-D8).
Further, at the Tax Court hearing, Deems admitted that he had earned
income in 2003 as a carpenter, did not file a tax return in 2003, and had no non-
frivolous issues to identify at that time—all of which provided further justification
for the denial of a face-to-face hearing. See 26 C.F.R. § 301.6330-1(d)(2) (A-D6,
A-D8). Consequently, the Tax Court did not err in granting the IRS’s motion for
summary judgment and determining that collection of the deficiency by levy could
proceed; for, Deems failed to present any non-frivolous, relevant issues to be
reviewed at an in-person CDP hearing.
As for the imposition of sanctions, the Tax Court was empowered to impose
a penalty on Deems, in any amount up to $25,000, if it found that he raised
frivolous or groundless positions or instituted and maintained the proceedings
primarily for delay. Roberts, 329 F.3d at 1229; 26 U.S.C. § 6673(a)(1). In
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Roberts, we affirmed sanctions where the taxpayer was “on notice that his claims
were frivolous.” Roberts, 329 F.3d at 1229. Deems was repeatedly warned about
maintaining frivolous arguments; he continued to do so anyway, so the imposition
of $1,000 in sanctions was not an abuse of discretion. See 26 U.S.C.
§ 6673(a)(1)(A); see also Roberts, 329 F.3d at 1229 (concluding that a $10,000
penalty was not an abuse of discretion). All of the arguments Deems presented
were frivolous; hence, he cannot find refuge in the argument that he was not
properly advised about which arguments lacked merit.
II.
Deems claims that the judge who presided over his case was biased. He did
not present the claim to the judge; thus, we review the question the judge should
have recused sua sponte for plain error. See Hamm v. Members of Bd. of Regents
of State of Fla., 708 F.2d 647, 651 (11th Cir. 1983). To establish plain error, one
must show that “(1) an error occurred; (2) the error was plain; (3) it affected [his]
substantial rights; and (4) it seriously affected the fairness of the judicial
proceedings.” Rodriguez, 627 F.3d at 1380 (citation and quotation omitted).
“Any justice, judge, or magistrate judge of the United States shall disqualify
[herself] in any proceeding in which [her] impartiality might reasonably be
questioned.” 28 U.S.C. § 455(a). A judge is also required to disqualify herself if
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she has a personal bias or prejudice against a party or personal knowledge of
disputed evidentiary facts in the proceeding. 28 U.S.C. § 455(b)(1). The standard
under § 455 is objective and “requires the court to ask whether an objective,
disinterested, lay observer fully informed of the facts underlying the grounds on
which recusal was sought would entertain a significant doubt about the judge’s
impartiality.” Bolin v. Story, 225 F.3d 1234, 1239 (11th Cir. 2000) (citation and
quotation omitted).
The allegation of bias must show that “the bias is personal as distinguished
from judicial in nature.” Bolin, 225 F.3d at 1239 (citation and quotation omitted).
That is, the bias “must stem from an extrajudicial source and result in an opinion
on the merits on some basis other than what the judge learned from [her]
participation in the case.” Phillips v. Joint Legis. Comm. on Performance and
Expenditure Review of the State of Miss., 637 F.2d 1014, 1020 (5th Cir. 1981)
(citation and quotation omitted).1 While a “judge’s remarks in a judicial context
[can] demonstrate such pervasive bias and prejudice that it constitutes bias against
a party,” rulings that are adverse to a party do not. Hamm, 708 F.2d at 651(citation omitted). Disqualification “ordinarily may not be predicated on the
1
The decisions of the former Fifth Circuit, handed down prior to the close of business on
September 30, 1981, are binding precedent on the Eleventh Circuit. Bonner v. City of Prichard,
661 F.2d 1206, 1209 (11th Cir. 1981) (en banc).
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judge’s rulings in the instant case or in related cases.” Phillips, 637 F.2d at 1020(citations omitted).
With regard to bias, Deems’s arguments are meritless. The purported bias
stem from comments the judge made at Deems’s hearing and in the orders granting
summary judgment and imposing sanctions, not from any alleged personal interest
in the resolution of Deems’s case. The judge made no remarks in a judicial
context that demonstrated a pervasive bias.
Contrary to Deems’s argument, the judge’s remarks concerning the origin of
the materials relied upon did not demonstrate a pervasive bias against pro se
litigants. The remarks simply commented on the origin of frivolous arguments the
court had witnessed. Furthermore, the court’s determination that Deems had
instituted the proceeding primarily for delay did not demonstrate pervasive bias, as
that determination was necessary to rule on the IRS’s motion for sanctions.
Rulings adverse to a party do not constitute pervasive bias. Hamm, 708 F.2d at
651 (citation omitted). In sum, the Tax Court exhibited no extrajudicial bias.
We accordingly affirm the court’s summary judgment and imposition of
sanctions.
AFFIRMED.
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